Section 8 developer TimeGate Studios thought it was off the hook for a $7.35 million arbitration ruling when it won its appeal last year over a dispute with Southpeak Interactive surrounding the game. Unfortunately for TimeGate, that ruling has been overturned.

The U.S. Fifth Circuit Court of Appeals has reinstated the award (via Polygon), again granting Southpeak the damages and the Section 8 IP. The battle stems from a suit in 2009 where TimeGate and Southpeak traded claims and counterclaims surrounding development of the game.

The news compounds what has already been a bad year for TimeGate, with the debate over the development of the ill-fated Aliens: Colonial Marines with Gearbox Studios, and layoffs at the studio just last month. It also throws into question the status of its recently announced shooter Minimum. We've reached out to TimeGate for comment and will update if we get a response.